Asian markets were all up in excess of 1%, while European markets saw moderate gains as well.

Yesterday's market rally was huge for the bulls, and formed a short-term double bottom in the markets and wiped away all of the losses from Tuesday.

Momentum suggests this market is more likely to breakout to new highs (above 1344 on the S&P) than it is to break recent lows (1294).

Yesterday epitomized why it is so difficult to short this market, even in what appears like solid technical setups - because with the Fed and POMO operations, the market doesn't tend to sell-off over a long period of time. Instead it is usually in a 1-2 day time frame with a "V" shaped bounce that occurs thereafter. Rarely do we see any basing at the lows.

Bulls managed to reclaim the 10 and 20 day moving average but will need to break and close above Tuesday's highs for clear sailing to 1344 on the S&P.

10 & 20 DMA crossover on the S&P to the downside will occur today. The last three times this has occurred, has resulted in a mild amount of additional selling - on average, about 30 points, before seeing the opposite upside crossover. However, when the downside crossover occurred back in April, there was a significant sell-off that ensued.

A break of S&P 1294 (last week's lows) would put in a lower-low in the markets, and confirm a downtrend being in place. The S&P also sits at that same price level, making it a significant price support level.

Market continues to trade specifically to the strength/weakness in oil. Rising oil prices will continue to hamper the markets going forward.

For the bears - Avoid allowing the bulls to close above the Tuesday highs, and above all costs, not allow for them to breakout to new recovery highs.

For the bulls - At the very least, close above 1332 on the S&P, and continue building on the gains from the past two sessions, off of oversold market conditions.

My conclusion: Yesterday's market drastically hampered the bears to push this market down further in the short-term, and as a result we are likely to see another push to new recovery highs.